i or affirmation · i, -----chris o'donnell , swear (or affirm) that, to the best of my...

I I I I I

SECUli IIIIIUI m n 14045021

/ vH8'SION

ANNUAL AUDITEq REPOR .. 1" FORM X-17~-5 ..

PART 111 1 na l Z2lit4 !

OMB APPROVAL OMB Number 3235-0123 Expires: March 31, 2016

;; 1~imated average burden ~ho~rs per response .. 12.00

: SEC FILE NUMBER

8- 67979 ~

FACING P A Gy\~:__---··"·-~~-~-~-··-:·~·-··~-:-x Information Required of Brokers and Deale

Securities Exchange Act of 1934 and Rule 17a-5 Thereunder

ANDENDING 12/31/13

/~

I REPORT FOR THE PERIOD BEGINNING _____ 0-:-1/::-:0-::-::-1/:7'::1~3 ___ _ MMIDD/YY ---------M-M_ffi_D~/Y_Y ____ ___

I I I I

A. REGISTRANT IDENTIFICATION

NAME OF BROKER-DEALER: North South Capital, LLC

ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use P.O. Box No.)

200 West Adams Street, Suite 2230 (No. and Street)

Chicago Illinois (City) (State)

:;; I OFFICIAL USE ONLY

FIRM ID. NO

60606 (Zip Code)

I NAME AND TELEPHONE NUMBER OF PERSON TO CONTACT IN REGARD TO THIS REPORT

Chris O'Donnell ----;,-(3_1...,.2)'-,-4_4,.;.5,....-5:.,_4 __ 0-:;,.0-,----(Area Code - Telephone No.)

I B. ACCOUNT ANT IDENTIFICATION

INDEPENDENT PUBLIC ACCOUNT ANT whose opinion is contained in this Report*

I Kehlenbrink, Lawrence & Pauckner (Name - if individual, state last, first, middle name)

I (Address) (City)

6296 Rucker Road, Suite G

CHECK ONE: I [!]Certified Public Accountant

0Public Accountant

0Accountant not resident in United States or any of its possessions.

I FOR OFFICIAL USE ONLY

I *Claims for exemption from the requirement that the annual report be covered by the opinion of an independent public accountant must be supported by a statement of facts and circumstances relied on as the basis for the exemption. See section 240. l7a-5(e)(2).

I I

SEC 1410 (06-02) Potential persons who are to respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB control number.

I I I I I I I I I I I I I I I I I I I

OR AFFIRMATION

I, Chris O'Donnell , swear (or affirm) that, to the --------------------------------------------------------------------best of my knowledge and belief the accompanying financial statement and supporting schedules pertaining to the firm of

North South Capital, LLC , as of

______ D_e_c_e_m_b_e_r_J __ I _____ , 20 ~ , are true and correct. I further swear (or affinn) that neither the company

nor any partner, proprietor, principal officer or director has any proprietary interest in any account classified soley as that of

a customer, except as follows:

This report** contains (check all applicable boxes): [!] (a) Facing page. [!] (b) Statement of Financial Condition. [!] (c) Statement of Income (Loss). [!] (d) Statement of Cash Flows.

NOTMYPUII.IC ·STATE OF IWNOIS M'f COMMISSION EXPIRES:10/19/15

[!] (e) Statement of Changes in Stockholders' Equity or Partners' or Sole Proprietor's Capital. [!] (f) Statement of Changes in Liabilities Subordinated to Claims of Creditors. [!] (g) Computation of Net Capital 0 (h) Computation for Determination ofReserve Requirements Pursuant to Rule l5c3-3. D (i) Information Relating to the Possession or control Requirements Under Rule 1 5c3-3.

Vice President itle

[!] (j) A Reconciliation, including appropriate explanation, ofthe Computation ofNet Capital Under Rule 15c3-l and the Computation for Detennination of Reserve Requirements Under Exhibit A of Rule 15c3-3.

D (k) A Reconciliation between the audited and unaudited Statements of Financial Condition with respect to methods of con-solidation.

[!] (l) An Oath or Affirmation. [!] (m) A copy of the SIPC Supplemental Report. [!] (n) A report describing any material inadequacies found to exist or found to have existed since the date of the previous audit.

**For conditions of confidential treatment of certain portions of this filing, see section 240.1 7a-5(e)(3).

I I I I I I I

,I I I I I I I I I I I

•

North South Capital, LLC

Year Ended December 2013

Financial Report


Public Acco-untants

To the Board of Directors North South Capital, LLC

Independent Auditors' Report

6296 Rucker Road, Suite G lndi:anap,olis, IN 46220

We have audited the accompanying financial statements of North South Capital, LLC, which comprise the statements of financial condition as of December 31, 2013 and 2012, and the related statements of income, members' equity, and cash flows for the years then ended, and the related notes to the financial statements, that you are filing pursuant to rule 17a-5 under the Securities Exchange Act of 1934.

Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America. This includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditors' Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors' judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.


Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the

financial position of North South Capital, LLC as of December 31, 2013 and 2012, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.

Report on Supplementary Information Our audits were conducted for the purpose of forming an opinion on the basic financial statements as a whole. The information contained in the schedules on pages 9 through 16 is presented for purposes of additional analysis and is not a required part of the basic financial statements, but is supplementary information required by rule 17a-5 under the Securities Exchange Act of 1934. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting

and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United

States of America. In our opinion, the information is fairly stated in all material respects in relation to the financial statements as a whole.

Indianapolis, Indiana January 24, 2014



Statements of Financial Condition

December 31, Assets 2013

Cash and cash equivalents $ 294,594 Cash for the benefit of customers 69 Cash deposit with clearing organization 100,000 Secured Demand Note 100,000 Accounts receivable 177,816 Prepaid expenses and deposits 34,213 Furniture and equipment, net 12,805

Total Assets $ 719,497

Liabilities and Members' Equity

Liabilities

Subordinated liability - SDN $ 100,000

Accounts payable 50,311 Accrued payroll and commissions 82,912

Accrued rent 179

Other current liabilities 2,955

Total liabilities 238,357

Members' Equity Memberships 425,000 Retained earnings (deficit) 56,140

Total members' equity 481 '140

Total Liabilities and Members' Equity $ 719,497

The accompanying notes are an integral part of the financial statements.

2

December 2012

$ 245,057

100,000

127,1 28,086 15,800

$ 516,1

$ 18,400 7,157 5,097 6,548

37,202

425,000 53,994

478,994

$ 516,196


Revenues Commissions Advisory revenue Underwriting Capital introduction Interest Other

Total revenues

Operating Expenses Compensation and benefits Occupancy Clearing fees Communications Regulatory fees Professional fees Other expenses

Total operating expenses

Net Income (Loss)


Statements of Income

For the Years Ended

December 31, 2013

$ 1,724,496 179,172 191,699 38,171

437 8,421

$

2,142,396

762,774 85,751

163,126 142,994

16,871 905,944

62,790

2,140,250

2,146

December 31, 2012

$ 706,704

$

114,306 382,503

60,090 371 832

1,264,806

499,670 80,863

143,356 90,605 13,872

204,317 65,968

1,098,651

166,155


3



Statements Members' Equity

Retained Memberships Earnings (Deficit)

Balance, December 31, 2011 $ 514,500 $ (112, 161)

Additional capital contribution (89,500)

Return of capital

Net income 166,155

Balance, December 31, 2012 425,000 53,994

Additional capital contribution

Return of capital

Net income 146

Balance December 31, 2013 $ 425,000 $ 56,140


4

I I


I Statements of Cash Flows

I For the Years Ended

I December 31, December

2013 2012

Operating Activities

I Net income (loss) $ 2,146 $ 166,155

Adjustments to reconcile net income to net

cash provided by operating activities:

I Depreciation and amortization 4,545 4,900

Changes in operating assets and liabilities

Accounts receivable (50,632) (126,086)

I Other current assets (6,127) (498)

Accounts payable 31,911 3,589

I Accrued expenses 69,244 (4,058)

Net Cash Provided by Operating Activities 51,087 44,002

I Investing Activities

I Purchase of furniture and equipment (1 ,550)

Net Cash Provided by (Used in) Investing Activities (1 ,550)

I Financing Activities

I Return of capital (89,500)

Secured Demand Note Liability (1 00,000)

I Additional capital investment SDN 100,000

Net Cash Provided by (Used in) Financing Activities (89,500)

I Increase (Decrease) in Cash and Cash Equivalents 49,537 (45,498)

I Cash and Cash Equivalents at Beginning of Year 245,057 290,555

I Cash and Cash Equivalents at End of Year $ 294,594 $ 245,057

I I


5



Notes To Financial Statements December 31, 2013

Note 1 - Significant Accounting Policies Description of Business North South Capital, is a registered broker and dealer. As a securities broker and dealer, the

Company is engaged in various securities trading, brokerage, investment management and advisory

activities serving a diverse group of customers. The trading and brokerage activities are provided

through the Company's fully-disclosed correspondent relationship with Pershing LLC, a subsidiary

of Bank ofNew York.

Estimates and Assumptions The process of preparing financial statements in conformity with generally accepted accounting principles requires the use estimates and assumptions regarding certain types of assets, liabilities, revenues, and expenses. Such estimates primarily relate to unsettled transactions and events as of the date of the financial statements. Accordingly, upon settlement, actual results may differ from estimated amounts.

Accounting Method The accounts of the Company are maintained on the accrual basis of accounting. Income earned from customer security transactions are recorded on a trade date basis. If payments are not received or the transaction has not settled on customer transactions, accounts receivable is recorded to recognize that income.

Accounts Receivable Management considers accounts receivable to be fully collectable; accordingly, no allowance for doubtful accounts is required. If amounts become uncollectible, they will be charged to operations when the determination is made.

Property and Equipment Purchases of property and equipment are recorded at their cost. Depreciation of $4,545 and $4,900 for the years ended December 31, 2013 and 2012 respectively has been computed using straight line rates of depreciation.

Income Taxes The Company has elected under the Internal Revenue Code, to be taxed as a partnership. Accordingly, the members rather than the Company will be taxed on income. Therefore, no provision or liability for income taxes has been included in these financial statements. Tax years before 2010 are no longer subject to tax examination.

Statement of Cash Flow~ For purposes of the statement of cash flows, the Company considers all highly liquid debt instruments purchased with a maturity date of three months or less, to be cash equivalents. The Company did not pay any interest or taxes during the years ended December 31, 2013 and 2012.

6



Notes To Financial Statements December 31,2013

Note 2- Cash Segregated Under Federal Regulation

Cash of$69 in 2013 and 2012, respectively, has been segregated in a special reserve bank account for the benefit of customers under rule 15c3-3 of the Securities and Exchange Commission.

Note 3- Property and Equipment

The following is a summary of property and equipment (at cost) less accumulated depreciation:

Computer equipment Telephone equipment Furniture and fixtures

Less: Accumulated depreciation

Total

Note 4- Commitments

December 3 1 , 2013

$ 17,415 7,920

30,471

17 666

December 31 , 2012

$ 15,865 7,920

28,921

The Company is committed under two operating leases for the rental of office space. Annual payments under these agreements are shown below:

For The Years Ended December

2014 $ 13 984

Total

Rent expenses for 2013 and 2012 were $64,984 and $61,468 respectively.

Note 5- Net Capital Requirements

The Company is required to maintain a minimum net capital by SEC Rule 15c3-1. Net capital required under the rule is the greater of $250,000 or 6-2/3% of the aggregate indebtedness of the Company. On December 31,2013, the Company had net capital of$534,122 which was $284,122 in excess of its required net capital of $250,000. The percentage of aggregate indebtedness to net capital was 25.9%.

7



Notes Financial Statements December 31, 2013

Note 6 - Control Requirements

There are no amounts, as of December 31, 2013, to be reported pursuant to the possession or control

requirements under Rule 15c3-3. The Company is in compliance with the exemptive provisions of Rule

15c3-3 under paragraph (k)(2)(ii) and thus is exempt from the provisions of Rule 15c3-3.

Note 7- Reconciliation Pursuant to Rule 17 a-5( d)( 4)

Computation of Net Capital Under Rule 15c3-l

There were no reconciling items between the December 31, 2013 unaudited Focus report and this

report.

Note 8- Secured Demand Note and Subordinated Liability

The majority member of the Company provided a Secured Demand Note Receivable of $100,000 to

the Company. The note is due on demand and it is non-interest bearing.

In exchange for the secured demand note, the Company provided a Subordinated Liability of

$1 00,000 payable to the majority member. This liability is subordinated to the claims of general

creditors and matures on June 28, 2016. Interest is payable at the rate of 3% per year.



Computation of Net Capital, Pursuant to Rule 15c3-l(f) December 31, 2013

Net Capital Members' equity

Plus subordinated demand note

Total Capital and Allowed Subordinated Liability Less: Nonallowable assets

Net capital before haircuts on security positions Haircuts on securities

Net capital

Aggregate Indebtedness

Net capital required based on aggregate indebtedness

Computation of Basic Net Capital Requirement Minimum net capital required (Based on minimum dollar

requirement)

Excess Net Capital

Net Capital Less Greater of 10% of Aggregate Indebtedness or

120% of Minimum Dollar Net Capital Requirement

Percentage of Aggregate Indebtedness to Net Capital

9

$

$

$

$

$

$

$

$

481,140 100,000

581 '140 47,018

534,122

534,122

138,357

9,224

250,000

284,122

234,122

25.9%



Statement of Changes in Subordinated Borrowings

For the Year Ended December 31, 2013

Subordinated borrowings at January 1, 2013

Increases: Issuance of subordinated note

Subordinated borrowings as of December 31, 2013

10

$

100,000

$ 100,000


Board of Directors North South Capital, LLC

6296 Rucker Road, Suite G mm:anaJJ>ons, IN 46220

In planning and performing our audit of the financial statements ofNorth South Capital, LLC as of and for the year ended December 31, 2013, in accordance with auditing standards generally accepted in the United States of America, we considered the Company's internal control over financial reporting (internal control) as a basis for designing our auditing procedures for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control. Accordingly, we do not express an opinion on the effectiveness of the Company's internal control.

Also, as required by rule 17a-5(g)(l) of the Securities and Exchange Commission (SEC), we have made a study of the practices and procedures followed by the Company, including consideration of control activities for safeguarding securities and including tests of such practices and procedures that we considered relevant to the objectives stated in rule 17(a)-5(g), in making the periodic computations of aggregate indebtedness (or aggregate debits) and net capital under rule 17a-3(a)(11) and for determining compliance with the exemptive provisions of rule lSc-3-3. Because the Company does not carry securities accounts for customers or perform custodial functions relating to customer securities, we did not review the practices and procedures followed by the Company in any of the following:

1. Making the quarterly securities examinations, counts, verifications, and comparisons, and the recordation of differences required by rule 1 7 a-13

2. Complying with the requirements for prompt payment for securities under Section 8 of Federal Reserve Regulation T ofthe Board of Governors ofthe Federal Reserve System

3. Obtaining and maintaining physical possession or control of all fully paid and excess margin securities of customers as required by Rule 15c3-3.

The management of the Company is responsible for establishing and maintaining internal control and the practices and procedures referred to in the preceding paragraph. In fulfilling this responsibility, estimates and judgments by management are required to assess the expectep benefits and related costs of controls, and of the practices and procedures referred to in the preceding paragraph, and to assess whether those practices and procedures can be expected to achieve the SEC's above-mentioned objectives. Two of the objectives of internal control and the practices and procedures are to provide management with reasonable but not absolute assurance that the assets for which the Company has responsibility are safeguarded against loss from unauthorized use or disposition, and that transactions are executed in accordance with management's authorization and recorded properly to permit preparation of financial statements in confonnity with generally accepted accounting principles. Rule 17a-5(g) lists additional objectives of the practices and procedures listed in the preceding paragraph.


To the Board of Directors of North South Capital, LLC Page Two

Because of inherent limitations in internal control and the practices and procedures referred to above, errors or fraud may occur and not be detected. Also, projection of any evaluation of them to future periods is subject to the risk that they may become inadequate because of changes in conditions or that the effectiveness of their design and operation may deteriorate.

A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or combination of deficiencies in internal control, such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented or detected and corrected on a timely basis.

A significant deficiency is a deficiency, or combination of deficiencies in internal control, that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.

Our consideration of internal control was for the limited purpose described in the first and second paragraphs and would not necessarily identify all deficiencies in internal control that might be material weaknesses. We did not identify any deficiencies in internal control and control activities for safeguarding securities that we consider to be material weaknesses, as defined above.

We understand that practices and procedures that accomplish the objectives referred to in the second paragraph of this report are considered by the SEC to be adequate for its purposes in accordance with the Securities Exchange Act of 1934 and related regulations, and that practices and procedures that do not accomplish such objectives in all material respects indicate a material inadequacy for such purposes. Based on this understanding and on our study, we believe that the Company's practices and procedures, as described in the second paragraph of this report, were adequate at December 31, 2013, to meet the SEC's objectives.

This report is intended solely for the infonnation and use of the Board of Directors, management, the SEC, the FINRA, and other regulatory agencies which rely on Rule 17a-5(g) under the Securities Exchange Act of 1934 in their regulation of registered brokers and dealers, and is not intended to be and should not be used by anyone other than these specified parties.

Kehlenbrink, Lawrence & Pauckner Indianapolis, Indiana January 24, 2014


Certified Public Accountant-;

To the Board of Directors North South Capital, LLC Indianapolis, Indiana

6296 Rucker Road, Suite G Indianapolis, IN 46220

In accordance with Rule 17a-5( e)( 4) under the Securities Exchange Act of 1934, we have performed the procedures enumerated below with respect to the accompanying Schedule of Assessment and Payments [General Assessment Reconciliation (Form SIPC-7)] to the Securities Investor Protection Corporation (SIPC) for the period from January 1, 2013 to December 31, 2013, which were agreed to by North South Capital, LLC and the Securities and Exchange Commission, Financial Industry Regulatory Authority, Inc., and SIPC, solely to assist you and the other specified parties in evaluating North South Capital, LLC's compliance with the applicable instructions of the General Assessment Reconciliation (Form SIPC-7). North South Capital, LLC's management is responsible for the North South Capital, LLC's compliance with those requirements. This agreed-upon procedures engagement was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants. The sufficiency of these procedures is: solely the responsibility of those parties specified in this report. Consequently, we make no representation regarding the sufficiency of the procedures described below either for the purpose for which this report has been requested or for any other purpose. The procedures we performed and our findings are as follows:

1. Compared the listed assessment payments m Form SIPC-7 with respective cash disbursement records entries:

Balance ofPrior Year SIPC-7T- Check #1389 for $1,464.00 written on 1-23-2013 SIPC-6 Balance- Check #1427 for $1,115.00 written on 7-17-2013

2. Compared the Total Revenue amounts of the audited Form X-17A-5 for the year ended December 31, 2013 with the amounts reported in Form SIPC-7 for the year ended December 31, 2013 noting no differences;

3. Compared adjustments reported in Form SIPC-7 with supporting schedules and working papers, transactions identified in specific general ledger accounts and entries on FOCUS reports filed for the quarters ended in 2013, noting no differences;


4. Proved the arithmetical accuracy of calculations reflected in Form SIPC-7 and in the related schedules and working papers, transactions identified in specific general ledger accounts and entries on FOCUS reports filed for the quarters ended in 2013, supporting the adjustments noting no differences; and

5. Since there was no overpayment canied forward to 20 3, we did not compare the amount of any overpayment applied to the current assessment with the Form SIPC-7T on which it was originally computed noting no differences.

We were not engaged to, and did not conduct an examination, the objective ofwhich would be the expression of an opinion on compliance. Accordingly, we do not express such an opinion. Had we performed additional procedures, other matters might have come to our attention that would have been reported to you.

This report is intended solely for the information and use the specified parties listed above and is not intended to be and should not be used by anyone other than these specified parties.

Kehlenbrink, Lawrence & Pauckner January 24, 2014


SIPC-7 (33-REV 7/10)

SECURtT!ES II\!VEST R PROTECTiON CORPORJ\T:O~J

c C' Box 9 1 5 \l\iasn~nator~ C· c_ 20 90 21 ~:

02-37 f-8300

General Ass ssment Reconciliation

For 1ne liscal year ended 12131/2013

iRead care!ully the Instructions ,n your Work1ng Copy betcre ccmpla11ng til's Form;

TO BE FILED BY ALL SIPC MEMBERS WITH FISCAL YEAR ENDINGS

(33 REV-: 101

1 Name o\ Member, address, Des1gnated Exam1n1ng 1\uthority, 1934 Acl reg1stration no. and mootn 1n wl1ich fiscal ye8r e.~d:: lc:

purposes ol the audt1 requHement ol SEC Rule 17a-5:

~7979 FINRA DEC

NORTH SOUTH CAPITAL LLC 1EY'16

200 W ADAMS ST STE 2230

CHICAGO iL 60606-5231

L

2 A. General Assessmenl 2e from page 2)

B. Less payment made wilh SIPC-6 filed (exclude interest)

Date

C. Less prior overpayment applied

D Assessment balance due or (overpayment)

E lnteresl computed on late payment (see instruction E)

Note II any ol the informa:10r shcwc :;r -

mailing label requtres correc11or:

any correcttons to mdicate on the form filed.

Name and telephone number oi p:; ::

contact respecting this lorm.

_j ______ _

d.-001

at 20% per annum

Total assessment balance and interest due (or overpayment carried forward) $ }00!

G. PAID WITH THIS FORM

Check enclosed, payable to SIPC

Total (must be same as F above)

H. Overpayment carried forward $( ________ _

3. Subsidiaries (S) and predecessors (P) included in this form (give name and 1934 Act registration number)

The SIPC member submitting this form and the

person by whom it is execuled represenl thereby

that all information contamed herein IS true, correct

and complete.

'2011_ This form and the assessment payment is due 60 days after the end of the fiscal year. Retain the Working Cop'i ,

tor a penod of not less than 6 years, the latest 2 years in an easily accessible place. ·

a::, Dates L.U Postmarked Received s:

Reviewed

L.U

> Calculations L.U

Documentation ___ _ Forward Copy ___ _

a::,

c.:> Exceptions c... C.l) Disposition of exceptio~s.

I DETERMINATION OF "SIPC N OPERATING REVENUES"

I AND GENERAL ASSESSMENT

litem No. 2a Tolal revenue (FOCUS Line 12/Part IIA. Une 9. Code 4030)

I 2b Additrons (1\ Total revenues from the securitres business ol subsidraries (except loreign subsidiarres) and

predecessors not rncluded above

I I I I I I I I I I I I I I I

Nel loss !rom orincipal transaclions ~~ securiires rn tradrng accounts

13) Net loss lrom principallransactrons rn commodiires in trading accounts

Interest and divioend expense deducted in de1ermin1ng rlem 2a.

Nel loss from management of or par\lcrpalion ~~ 1ne underwriirng or drstribution ol securrt1eS

(6) other than advertrs:ng, printrng. lees and legal lees deducted in determrning ne:

prolr! from management of or participation 1n unaerwrillng or d:stributron ol securitres.

(?I Nel loss lrom securrtres rn rnves1men! accounts

To;al additions

2c Deductions ~~) Revenues lrorr the distribulron of shares of a open end tnvestmen: company or un:t

investment trust. from the sale ol varrable !rom lhe busrness ot rnsurance, from rnvestmen1

advrsory servrces rendered to registered rnvestment companies or rnsurance company separate

accounts. and from !ransact:ons in security futures products.

Revenues !rom commodity transactions

Commissions, floor brokerage and clearance pard to other S!PC members tn connectiOn w:tn

securr\les transactions.

Reimbursements for postage in connection wrth proxy solicitation

Nel gain irom securrties in investment accoun;s

(6) 100% ol commissions and markups earned trom transactrons in (il certifrcales oi and

(ii} Treasury bills, bankers acceptances or commercial paper thai mature nrne months or less

from issuance dale

(7) Direct expenses of printing advertising and legal fees incurred i~ connection with other revenue

:elated to the securities business (revenue defined by Section 16(9)(L) o! the Aci\

(S\ Olher revenue not relaled erther drrectly or rndrreciiy lo the securities busrness.

Instruction C):

(Deductions in excess oi $100.000 require

(9) (1) Totalrnteresl and divrdend expense Line 22/PART ItA Line 13

Code 4075 plus line 2b(4) above) but not 1n excess 3 J 1 oi total inlerest and drvidend income. $ ___ ..::::::...:;:-'_.:._' ------

40% o! margin interest earned on customers secur111es

accounts (40% ol FOCUS line 5. Code 39601

Enter the greater olline (1) or (irt

Total deductions

2d. SIPC Net Operating Revenues

2e General Assessment@ .0025

2

Amounts ior a·,e fiSCai rnnrng 1!1/2013

and endrng 12/3112013

Eliminate cents



Year Ended December 31,2013

SIPC General Assessment Reconciliation Supplemental Report


To the Board of Directors North South Capital, LLC Indianapolis, Indiana

In accordance with Rule I 7a-5(e)(4) under the Securities Exchange Act of 1934, we have performed the procedures enumerated below with respect to the accompanying Schedule of Assessment and Payments [General Assessment Reconciliation (Form SIPC-7)] to the Securities Investor Protection Corporation (SIPC) for the period from January 1, 2013 to December 31,2013, which were agreed to by North South Capital, LLC and the Securities and Exchange Commission, Financial Industry Regulatory Authority, Inc., and SIPC, solely to assist you and the other specified parties in evaluating North South Capital, LLC's compliance with the applicable instructions of the General Assessment Reconciliation (Form SIPC-7). North South Capital, LLC's management is responsible for the North South Capital, LLC's compliance with those requirements. This agreed-upon procedures engagement was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants. The sufficiency of these procedures is solely the responsibility of those parties specified in this report. Consequently, we make no representation regarding the sufficiency of the procedures described below either for the purpose for which this report has been requested or for any other purpose. The procedures we performed and our findings are as follows:

1. Compared the listed assessment payments m Form SIPC-7 with respective cash disbursement records entries:

Balance ofPrior Year SIPC-7T- Check #1389 for $1A64.00 written on 1-23-2013 SIPC-6 Balance Check #1427 for $1,115.00 written on 7-17-2013

2. Compared the Total Revenue amounts of the audited Form X-17A-5 for the year ended December 31, 2013 with the amounts reported in Form SIPC-7 for the year ended December 31, 2013 noting no differences;

3. Compared adjustments reported in Form SIPC-7 with supporting schedules and working papers, transactions identified in specific general ledger accounts and entries on FOCUS reports filed for the quarters ended in 2013, noting no differences;


4. Proved the arithmetical accuracy of the calculations reflected in Form SIPC-7 and in the related schedules and working papers, transactions identified in specific general ledger accounts and entries on FOCUS reports filed for the quarters ended in 2013, supporting the adjustments noting no differences; and

5. Since there was no overpayment carried forward to 201 we did not compare the amount of any overpayment applied to the current assessment with the Form SIPC-7T on which it was originally computed noting no differences.

We were not engaged to, and did not conduct an examination, the objective of which would be the expression of an opinion on compliance. Accordingly, we do not express such an opinion. Had we performed additional proce?ures, other matters might have come to our attention that would have been reported to you.

This report is intended solely for the information and use of the specified parties listed above and is not intended to be and should not be used by anyone other than these specified parties.

Kehlenbrink, Lawrence & Pauckner January 24, 2014

/

I I SIPC-7

SECURITiES INVESTOR PR ECTiON CORPORA"T:r]~·J 0 .0. Box 9 185 Wash1naton 0 C 20C90 21 ·•

202·37 (8300

I I I I I I I I I I I I I I I I I

(33-REV 7110) General Assessment Reconciliation

For the liscal year ended 12131/2013

!Read curelully the inslruclions 1n your Working Copy before completing lh1s Form)

TO BE FILED BY ALL SIPC MEMBERS WITH FISCAL YEAR ENDINGS

1. Name ol Member, address, Designated Examim

purposes ol the audit requirement o! SEC Rule 17a·

~7979 FINRA DEC

I ;ORTH SOUTH CAPITAL LLC 16*16

200 W ADAMS ST STE 2230

CHICAGO IL 60606-5231

L

2. A. General Assessment (item 2e from page 2)

Authority, 1934 Act registration no. and month in which fiscal year ends lc:

Note: It any ol the information show>

mailing label requires correction.

any corrections to [email protected] a::;;

indicate on the form tiled.

Name and telephone number oi i.Je'~~

contact respecting this form.

_j ______ _

8. Less payment made with SIPC·6 filed (exclude interest)

$ _ _,3'-1-l.w..l b"'-----/115

7*'17---!J Date Paid

C. Less prior overpayment applied

D. Assessment balance due or (overpayment)

E Interest computed on late payment (see instruction E) !or _______ days at 20% per annum

F. Total assessment balance and interest due (or overpayment carried forward)

G PAID WITH THIS FORM: Check enclosed, payable to SIPC

Total (must be same as F above)

H. Overpayment carried forward

$ _ ____:::.')_..:0_;;:_0_:_/ ---

$( ________ _

:1-0vl

$ '} 00 ! ________ _

3. Subsidiaries (S) and predecessors (P) included in this 1orm (give name and 1934 Act registration number):

The SIPC member submitting this form and the

person by whom it 1s executed represent thereby

that all information contained herein is true, correct

and complete.

Dated the 'l\-f day ot Tail'li..<.W} '20 ~~ 1Au!hori?eo SHJ!Hllorer

~I)')

This lorn: and the assessment payment is due 60 days a.fter the ~nd of the fiscal year. Retain the Working Cop:; .~

for a pertod of not less than 6 years, the latest 2 years man eastly accessible place.

ffi Dates :z: Postmarked Received Reviewed

L.U

> Calculations __ _ L.U

Documentation--·-- Forward Copy----··

a:: c.;> Exceptions: Q..

en Disposition of exceptions 1

I DETERMINATION OF "SIPC NET OPERATING REVENUES"

I AND GENERAL ASSESSMENT

litem No. 2a. Total revenue (FOCUS Line 12/Part 'I lA Line 9. Code 4030)

12b. Additions: ( 1) Total revenues from the securities business ol subsidiaries (except foreign subsidiaries) and

predecessors not included above.

I I I I I I I I I I I I I I I

(2) Net loss lrorn principal transactions in securities 1n trad1ng accounts.

(3) Net loss from principal transactions in commodities in lrading accounts.

Interest and dividend expense deducted in determining item 2a.

(5) Net loss :rom management ol or participation in tne underwriting or distribution of securil!es.

(6) Expenses other than adverlising, print1ng, regrstration lees and legal lees deducted tn determining ne:

pro!it from management ol or participation in underwrlttng or distribution ol securities.

(7) Net loss from secur1t1es 1n investment accounts.

To:al additions

2c. Deductions: (1) Revenues !rom the distribution of shares of a registered open end investment company or un:t

investment trust, from the sale ol variable annuities. from the business ol insurance. from mvestment

advisory services rendered to registered investment companies or insurance company separate

accounts. and from transactions in security futures products.

121 Revenues from commodity transactions.

(3) Commissions, floor brokerage and clearance paid to other SIPC memoers m connection witn

securities transactions.

14) Reimbursements for postage in connection with proxy solicitation.

(5) Net gain from secunties in investment accounts.

(6) 100% of commissions and markups earned from transactions in (il certificates of deposit and

(ii) Treasury bills, bankers acceptances or commercial paper that mature nine months or less

from issuance date.

(7) Direct expenses of printing advertising and iegallees incurred in connection with otner revenue

related to the securities business (revenue detined by Section 16(9)(Ll ol the Act)

(8) Other revenue not related either directly or indirecliy to the securities bus1ness.

(See Instruction C)

(Deductions in excess of $100.000 require documentation)

(9) (i) Total interest and dividend expense (FOCUS Line 22/PART IIA Line 13.

Code 4075 plus line 2b(4) above) but not in excess

of total interest and dividend income.

(ii) 40% ol margin interest earned on customers secuflileS

accounts (40% of FOCUS line 5. Code 3960)

Enter the greater of line (i) or (iii

Total deductions

2d SIPC Net Operating Revenues

2e General Assessment@ .0025

2

Amounts lor the tisca: beginning 1/112013 and ending 1213112013

Eliminate cents

$ 11 tln .. , 3 1~h

Q

(;C ''"),.. v l . ...~0/

I

i or affirmation · i, -----chris o'donnell , swear (or affirm) that, to the best of my...

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